PFE - Short Interest Peaks At 81% Just Prior To Mylan Merger Cover Your Position

• Mylan has undergone a contraction in valuation over the last 5 years, and the upcoming Viatris merger comes at a crucial time for the company.
• The deal structure means Viatris stock looks attractive on 2021 pro forma multiples of ~5x-8x EV/EBITDA.
• Short interest has peaked at ~81% for Mylan, to cover potential trading down that occurs after these types of spinoffs, thus pricing risk is high.
• Questionable guidance and headwinds from APAC regions mean revenue growth looks thin for Viatris, offset by the large geographical reach and footprint in emerging markets.
• The company is committed to a dividend of 25% free cash flows, and deleveraging the debt ratio to 2.5x, whilst maintaining an investment grade rating.

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